Trudeau sends aide to Morneau

The Globe and Mail (Atlantic Edition) - - FRONT PAGE - ROBERT FIFE BILL CURRY

PM ad­viser moves into key fi­nance role

Justin To to head bud­get-mak­ing team amid tur­moil over tax changes

Prime Min­is­ter Justin Trudeau is plac­ing one of his se­nior pol­icy ad­vis­ers into Bill Morneau’s of­fice as the Fi­nance Min­is­ter strug­gles to con­tain the back­lash over pro­posed re­forms to small busi­ness taxes and pre­pares for a fall fis­cal update and 2018 bud­get.

Mr. Trudeau’s deputy di­rec­tor of pol­icy, Justin To, is mov­ing to the Fi­nance depart­ment to be­come Mr. Morneau’s pol­icy and bud­get di­rec­tor – a job that is re­spon­si­ble for tax changes and other bud­getre­lated is­sues.

It is an in­flu­en­tial po­si­tion that in­volves lead­ing the min­is­ter’s bud­get-mak­ing team and meet­ing with groups look­ing to get their pri­or­i­ties funded. Mr. To is re­plac­ing Robert As­selin, who is leav­ing gov­ern­ment for the pri­vate sec­tor.

Plac­ing one of Mr. Trudeau’s eco­nomic and fi­nan­cial ad­vis­ers in the Fi­nance Min­is­ter’s of­fice comes as some Lib­eral MPs have crit­i­cized Mr. Morneau’s small­busi­ness tax changes in re­sponse to grow­ing protests from doc­tors, den­tists, lawyers, farm­ers and other small-busi­ness own­ers.

How­ever, Mr. Morneau’s of­fice said the move is un­re­lated to cur­rent events. The min­is­ter’s spokesman, Daniel Lau­zon, told The Globe and Mail on Fri­day that Mr. As­selin in­formed the min­is­ter around the time of the spring bud­get that he in­tended to leave gov­ern­ment in the fall.

“Shortly there­after dis­cus­sions be­gan about con­ti­nu­ity of busi­ness,” Mr. Lau­zon said in an e-mail. “The ob­vi­ous and best so­lu­tion from the min­is­ter’s of­fice per­spec­tive was for Justin To, who had been in­ti­mately in­volved in the bud­get process from Day 1, to oc­cupy the di­rec­tor of pol­icy po­si­tion. Though no of­fi­cial an­nounce­ment or move has been made, the plan is for the tran­si­tion to take place grad­u­ally and seam­lessly.”

Con­ser­va­tive fi­nance critic Pierre Poilievre ques­tioned the gov­ern­ment’s ex­pla­na­tion for Mr. To’s move to the Fi­nance depart­ment, say­ing the tim­ing is too co­in­ci­den­tal.

“This is clearly a res­cue mis­sion. Bill Morneau’s tax grab on lo­cal busi­nesses and fam­ily farm­ers has un­leashed po­lit­i­cal chaos in the Lib­eral cau­cus,” he said. “It is a di­rect re­sult of a fu­ri­ous back­lash on the ground in Lib­eral rid­ings across the coun­try and the Prime Min­is­ter is send­ing in a top op­er­a­tive to try to get this cri­sis un­der con­trol.”

Mr. To’s move to the Fi­nance Min­is­ter’s of­fice is part of a larger move­ment to in­sert ad­vis­ers from the Prime Min­is­ter’s Of­fice into cab­i­net min­is­ters’ of­fices in what some Lib­er­als say is an ef­fort to gain greater day-to-day in­flu­ence over min­is­te­rial de­ci­sion-mak­ing.

At least six for­mer PMO staffers are now chiefs of staff to cab­i­net min­is­ters, in­clud­ing at For­eign Af­fairs, Nat­u­ral Re­sources, Na­tional De­fence, Veter­ans Af­fairs, Small Busi­ness and the House Leader’s of­fice.

Some Lib­er­als, speak­ing on back­ground, said Mr. Trudeau sim­ply wants to put the best qual­i­fied peo­ple into these min­is­te­rial po­si­tions – in­di­vid­u­als who have im­pressed him with their abil­i­ties and trust.

Other Lib­er­als say the draw­back is that for­mer Trudeau aides may be un­will­ing to chal­lenge the PMO when nec­es­sary.

“They are very com­pe­tent peo­ple but if you look at it as a whole, there is a pat­tern: It is to make sure that there is no re­sis­tance and when the will of PMO is asked, it is ex­e­cuted without ques­tion,” one se­nior Lib­eral said. “That is the per­cep­tion mak­ing the rounds.”

Mr. Trudeau’s com­mu­ni­ca­tions di­rec­tor, Kate Pur­chase, de­fended the staffing move in an e-mail, call­ing Mr. To “one of the most ex­pe­ri­enced and well-re­spected staffers in gov­ern­ment.” She said he has been in­te­gral to the plan­ning of the past two bud­gets.

The small-busi­ness tax changes have proven to be a dif­fi­cult is­sue for Mr. Morneau and the topic is ex­pected to dom­i­nate Mon­day’s re­turn of Par­lia­ment from the sum­mer re­cess.

Lib­eral MPs say they’ve been inundated with calls about the pro­posed tax changes, and some are urg­ing Mr. Morneau to make changes be­fore leg­is­la­tion is tabled. The gov­ern­ment is con­sult­ing on the pro­posed changes un­til Oct. 2, but doesn’t ap­pear will­ing to back down on the essence of its plan.

The fed­eral gov­ern­ment main­tains its three-part pro­posal will close what it says are un­fair tax loop­holes used by wealthy small busi­ness own­ers and pro­fes­sion­als and will en­sure that ev­ery­one is pay­ing their fair share. The Prime Min­is­ter has re­peat­edly said he will make “no apolo­gies” for the gov­ern­ment’s com­mit­ment to help­ing the mid­dle-class by hav­ing wealthy peo­ple pay more.

Busi­ness groups are band­ing to­gether to in­sist the changes could have dev­as­tat­ing con­se­quences on small busi­ness own­ers, many of whom make up the bulk of the so-called mid­dle-class.

Sean Speer, who held se­nior eco­nomic ad­vi­sory po­si­tions in both the PMO and the Fi­nance Min­is­ter’s of­fice un­der the Con­ser­va­tives and who knows both Mr. As­selin and Mr. To, said he’s in­clined to be­lieve the Lib­eral gov­ern­ment’s ex­pla­na­tion.

“On one hand, you could think of it as PMO try­ing to have more con­trol of the Min­is­ter of Fi­nance’s of­fice and agenda. The flip side is also true,” he said. “This gives Min­is­ter Morneau some­one with re­ally di­rect re­la­tion­ships in the Prime Min­is­ter’s Of­fice, which may help ad­vance some files that maybe he was hav­ing dif­fi­culty with.”

Mr. Speer, who worked with Mr. To dur­ing the for­mal tran­si­tion of power from the Con­ser­va­tives to the Lib­er­als, spoke highly of him.

“Justin [To] is a re­ally no­table quan­ti­ta­tive re­searcher,” he said. “I think he’s a re­ally im­pres­sive dude.”

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